2012 is shaping up to be a year of many changes, including many new trends that continue to evolve in the world of real estate investing. So what can we expect in the new year and how can real estate investors stay ahead of the curve?
It is highly likely that we will see one or two new rounds of government initiatives before the 2012 presidential election. However, as with the latter, they are unlikely to directly help many owners and if anything further restrict conventional mortgages rather than making them more flexible. The only exception may be the FHA extension of the 90 day rule waiver. These investors can continue to easily sell homes to new buyers who can immediately utilize low down payment financing.
Inventory levels are expected to continue to decline, despite a final elimination of the remaining foreclosures underway at this time. Banks will continue their strategies to keep home prices rising and a continued rise will balance new listings. However, in many parts of the country, real estate investors will find that the REO shortage and short selling continues. This will mean having to work with major bulk REO buyers to get their hands on a significant number of wholesale properties, which means forging new contacts and partnerships is now essential.
Current improvements in the US housing market are expected to continue and grow exponentially. Home ownership will continue to gradually increase and new confidence from US buyers should offset any slowdown in demand from overseas investors who are seeing their own local markets recover as well. As for hotspots, coastal resort areas and cities with the best labor markets are expected to produce the highest returns. Top picks for 2012 include New York, Miami, San Francisco, San Jose and Washington.
With conventional mortgages still hard to come by, especially for high-priced properties, we’re likely to see more growth in the lower price ranges. As real estate investors become more aware of the availability of transactional finance and focus their marketing more on attracting buyers, transactional lenders are likely to be among the biggest winners in the new year.
Marketing will see some of the biggest swings for real estate investors throughout 2012. Investors shouldn’t just sit down to plan budgets and dates for next year’s marketing, but focus on developing permission-based and mobile marketing initiatives as well as local search. Trying to catch up with new trends next year is going to mean an uphill battle. Now is the time to start developing so that the large number of cash-rich buyers at tax time can be cashed in.